Assets and Liabilities Held for Sale

9 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Assets and Liabilities Held for Sale

ASSETS AND LIABILITIES HELD FOR SALE

During the third quarter of fiscal 2024, the Company entered into a definitive agreement to sell its Air Distribution Technologies ("ADTi") business included within the Global Products segment. As of June 30, 2024, ADTi met the criteria

to be classified as held for sale and the assets and liabilities of this business are separately presented in the consolidated statements of financial position.

The following table summarizes the asset and liabilities associated with ADTi classified as held for sale (in millions):

	June 30, 2024
Assets Held for Sale
Accounts receivable - net	$	91
Inventories	93
Other current assets	21
Current assets held for sale	205
Property, plant and equipment - net	83
Other intangible assets - net	308
Other noncurrent assets	131
Impairment on assets held for sale	(35)
Noncurrent assets held for sale	487
Total Assets	$	692
Liabilities Held for Sale
Accounts payable	$	113
Accrued compensation and benefits	13
Other current liabilities	23
Current liabilities held for sale	149
Pension and postretirement benefits	5
Other noncurrent liabilities	198
Noncurrent liabilities held for sale	203
Total Liabilities	$	352

Based on the total consideration expected from the sale, net of costs to sell, the Company recorded non-cash impairment charges on the allocated goodwill of $21 million and the held for sale disposal group of $35 million within restructuring and impairment costs in the consolidated statements of income during the three months ended June 30, 2024.    

The business did not meet the criteria to be classified as a discontinued operation as the divestiture does not represent a strategic shift that will have a major effect on the Company's operations and financial results. The transaction is expected to close in the fourth quarter of fiscal 2024.

No impairment charges were recorded during the three months ended June 30, 2023. During the nine months ended June 30, 2023, the Company recorded impairment charges for the Global Retail business of $438 million and the Building Solutions Asia Pacific segment of $60 million. The impairment charges were primarily due to reductions in the estimated fair values of the businesses to be disposed as a result of negotiations with potential buyers and were recorded within restructuring and impairment costs in the consolidated statements of income. During the third quarter of fiscal 2023, the Company concluded that its Global Retail business no longer met the criteria to be classified as held for sale, as it was no longer probable that it would be sold in the next 12 months. The net assets were reclassified to held and used at the lower of fair value or adjusted carrying value, and due to prior period impairment charges recorded, there was no impact to the consolidated statements of income as a result of this reclassification.